Why Gas Stations are the New Quick-Service Restaurants

By David Mostovoy

When it’s time to refuel, where do you go? A decade ago, you likely chose based on gas prices. Now when that light pops up, it triggers an almost Pavlovian response: perhaps you crave a taco at Sunoco, or breakfast bowl from QuickTrip… Gas stations are the new quick-service restaurants. According to a recent NACS study, 42% of drivers go into the store when fueling up, a 7-point jump from 2015. 16% of drivers surveyed said food was the primary determinant in selecting a gas station.

Gas station food is not a millennial-driven quagmire. It’s about profitability in a very competitive, regulated industry. Fuel margins are on the downturn – gas stations make pennies on the gallon. Cigarette sales aren’t what they used to be; taxes keep going up as popularity dwindles.

Some gas providers forgo partnerships altogether and instead want to build quick-service chains. Marathon Petroleum Corp.’s CEO recently outlined a plan to spend $380 million on Speedway private-label products. Their investor, Elliott Management Corp., is pushing Marathon to spin off its convenience store efforts in hopes of maximizing the value of both. We will continue to track Marathon’s progress into the food service space.

Quick Stats:

80% – Gasoline purchased at U.S. convenience stores including Zenput clients MAPCO and Sunoco. This is up 20% since 1997.

0.4% – The percent of U.S. gasoline stations owned by the five largest oil companies; (a decrease from 1.9% in 2008)

45% – Millennials who stated that food was equally as important as gas when determining where to refuel.

20,000 – Number of convenience stores not offering gas that have shuttered since 2012.

28 – Fueling sites added to big-box store locations every month.

“20 years ago, we’d rarely talk about what we’d sell in stores, but it’s really taken root over the past 10 to 12 years and we had to reshape our business to make that possible,” said Billy Milam, president of RaceTrac Petroleum Inc., a regional chain that operates 450 outlets across the south.

RaceTrac celebrates its in-store offerings and was recognized as CSNews’ 2017 Beverage Leader of the Year. RaceTrac’s Executive Director of Food Programs Steven Turner reflected: “We want to continue to use these categories to bring guests into our stores and, once they are there, get them to try our new food offer. When we do this successfully, our overall program has experienced great results.”

According to a new study released by Market Force, QuikTrip (QT) is leading the way as America’s favorite hybrid gas station – convenience store. The Oklahoma-based company known for their made-to-order pizzas and sandwiches operates 700+ stores in the Midwest and South. “We wouldn’t be investing our money on in-store sales if we didn’t think that was the future,” stated spokesperson Michael Thornbrugh. QT is poised to surpass $10B in annual revenue, with 25% derived from in-store purchase.˜

QuikTrip’s focus on operational excellence is paying off, as shown in EnergyPoint Research’s recently completed 2017 Gasoline Retailers Survey. The retailer took first place in top-level categories: service quality, food and merchandise, ease of transactions, and store facilities. The retailer also received top honors in a number of regional categories as well.

Improving operations starts with gaining more visibility into operations across every location. Zenput is the preferred mobile solution of convenience store and gas station operators in the United States and beyond. Zenput enables field managers, franchise owners, and corporate operators to track performance and improve execution so every store operates as well as their best store. Zenput even integrates with thermometers to increase food safety. Schedule a demo to learn more.